In a recent press release, Keryx Biopharmaceuticals (KERX) made it known that the Perifosine (KRX-0401) X-PECT Phase 3 Clinical Trial did not meet the requirements necessary to be approved for marketing. The main setback was that the drug did nothing to increase the lifespan of the patients who took it combined with chemotherapy treatment.
This is a major setback for the pharmaceutical company, which had high hopes for the drug. The company has not yet made it clear whether or not it will be pursuing its investigations into the effectiveness of Perifosine. In one statement, it was made clear that resources would be funneled towards the Phase three trials for Zerenex, another drug produced by Keryx.
Various other late-stage programs with AEZS-108 and AEZS-130 are also scheduled to continue, despite the setback. As with all companies in the particularly fickle biopharmaceutical industry, setbacks have to be expected. It's encouraging to see that Keryx has other drugs ready to be tested and released, so it may be too soon to tell whether its due for a price decline after Perifosine
Having said that, it must be noted that immediately following this announcement Keryx stock declined greatly. Even the hope that the drug, originally intended to treat colorectal cancer, would be successful in the trials for multiple myeloma is dwindling fast. It is now believed by some that these trials will too be cancelled due to the failure. All tests are essentially on hold until further notice.
The news is not all bad. Keryx has a few cards up its sleeves in the form of other drugs currently under development. As mentioned previously, Zerenex appears to be a very promising drug for the company. This drug has successfully made it to Phase 3 trials and appears to be doing well, although a few slight concerns have been raised regarding some side-effects. These concerns include the build-up of toxicity that may occur and the fact that, in extreme cases, it can cause bowel blockage.
For many, Zerenex appears to be the answer to all of the problems Keryx is currently facing. Should the drug be successful, there should be a marked improvement in this company by 2013. Having missed its chance with the Perifosine trials, it is now up to Zerenex to save the day. There are a few things that may prevent the success of the drug. For one, although Keryx appears to have the financial resources required to pursue this drug, it is equally as likely to run into unforeseeable financial difficulties that will place a significant amount of strain on its resources and may result in the trial not reaching completion. Many still hold out the hope that Zerenex will be a gain, rather than a loss in the long run. This is a scenario that warrants close monitoring.
The real question may be where the company will be in a few years time. If Keryx has enough cash to push Zerenex, it just needs an approval after testing. If Keryx has sustained more losses by that time, a success in Zerenex testing may be moot. The general economy can dictate the price at which current Keryx drugs are selling, and if they will continue to sell.
Major competitors for Keryx are Allos Therapeutics (ALTH) and New Link Genetics (NLNK), both of which are also developing cancer drugs at the same level as Keryx. There are several more advanced companies, such as Pfizer (PFE), that function at a higher level than any of these companies do, but it is safe to say that Allos and New Link are among the more serious threats that Keryx must face.
Allos Therapeutics recently agreed to be acquired by Spectrum Pharmaceuticals (SPPI). The deal will place Allos in a very good position indeed in the cancer drug business as Spectrum has the resources at hand necessary to market one of the more promising drugs that Allos has developed, namely, Fotolyn.
Spectrum itself can be seen as a competitor to Keryx, but lately it has been experiencing quite a few setbacks. For example, a very recent finding showed that the company's most promising drug, apaziquone, failed to prevent bladder tumors from occurring in two separate studies. Although Spectrum has the resources to continue with the study, and although there is still a chance that the drug will be approved,it is generally considered to be a very dark time for Spectrum indeed and its stocks have suffered heavily. The acquisition of Allos, combined with the possible success of Fotolyn, may be the boost that Spectrum needs and another dagger toward Keryx.
New Link is recently on the up. This is evidenced as it and its CEO were recently given Prometheus Awards granted each year by the Technology Association of Iowa. These are awards that are handed out specifically to those companies that have achieved great technological in the state. New Link is a formidable opponent, and the recognition furthers this point.
Baxter (BAX), another competitor of Keryx, has recently partnered with Momenta Pharmaceuticals (MNTA) to produce generics for certain biotechnology drugs. Baxter is another company that functions in a similar sphere to Keryx and is therefore a direct competitor in the drug arena. Although Baxter is not currently working on any cancer cures, it still is a large and aggressive opponent in other area of drug development and production.
And last, but not least, Shire (SHPGY) plans to acquire FerroKin BioSciences, a company dealing mainly in drugs that counteract iron overloads. This is also a company that is in the same category as Keryx which means that it too may be stand in Keryx's way in the future.
With strong opponents, Keryx cannot afford another testing setback. The pharmaceutical industry is cut-throat, and with so many companies featuring big purses, falling behind puts a company at a supreme disadvantage. Until Keryx can prove success with a marketable drug, you'll want to steer clear.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.